Category Archives: Labor

Employers Beware of the Burden of Claiming Employees are Not Entitled to Back Pay Based on Their Immigration Status in an NLRB Hearing

Contributed by Sara Zorich

The National Labor Relations Board (NLRB) has raised the bar making it more difficult for employers to defend NLRB claims for back pay based on the affirmative defense that the employee is not authorized to work in the United States.  The NLRB recently held that an employer must articulate with particularity their basis for claiming that an employee is not entitled to back pay based on the employee’s immigration status and general assertions are insufficient to satisfy the employer’s burden.  (See Flaum Appetizing Corp et. al., 357 NLRB No. 162, Dec. 30, 2011).  In Flaum, the majority held that the employer was not entitled to discovery, the ability to subpoena documents or examine witnesses on the immigration status of the employees unless and until the company had submitted specific factual evidence in support of its position that the employees were not authorized to work in the United States.  Thus, employers should be aware that the NLRB will most likely require the employer to proffer extensive evidence of the employee’s alleged undocumented status prior to entertaining discovery on the issue.

Pro-Union NLRB Contradicts U.S. Supreme Court: Declares Employee Class-Action Waivers Violate Labor Law

Contributed by Jeff Risch

On January 3, 2012, the NLRB held that a nationwide home builder committed an unfair labor practice under the National Labor Relations Act (NLRA) by implementing a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions (D.R. Horton Inc. and Michael Cuda, 357 NLRB 184, 1/3/11). In short, the NLRB held that employers may not compel employees to waive their right to collectively pursue litigation of employment claims in all forums, arbital and judicial.

Michael Cuda, a superintendent for Horton, claimed that he and other similar superintendents for the company were prevented from pursuing a wage and hour class-action/collective-action under the Fair Labor Standards Act (FLSA); alleging that they were misclassified as exempt employees.  Horton required Cuda and other employees to execute an arbitration agreement whereby they individually agreed to forego class-action relief of all types relating to any employee dispute.  NLRB Chairman Mark Gaston Pearce (D) and Member Craig Becker (D) found that this mandatory arbitration procedure violated Section 8(a)(1) of the NLRA because it interfered with the statutory right of employees to engage in “protected concerted activity for their mutual benefit.”

In so holding, the NLRB took issue with the U.S. Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion, U.S., No. 09-893, 4/27/11.  In Concepcion, the court, in a 5-4 decision, enforced AT&T’s customer cellular telephone contract that provided for mandatory arbitration on an individual basis and prohibited class action proceedings despite conflicting California state law.  The court essentially held that the Federal Arbitration Act (FAA) preempts state laws that prohibit contracts from preventing class-action lawsuits.  In judicial decisions that have since followed Concepcion, courts throughout the U.S. have concluded that employees may waive class-action rights by agreeing to individualized arbitration through employment arbitration agreements.  

In distinguishing Concepcion, the NLRB held that employment arbitration agreements (unlike consumer contracts) cannot prevent employees from waiving their rights protected by the NLRA (i.e. collectively pursue wage/hour claims and/or disputes over terms and conditions of employment). The NLRB also reasoned that Concepcion involved a conflict between the FAA and a California state law, which implicated the U.S. Constitution’s Supremacy Clause; whereas in D.R. Horton the Supremacy Clause was not called into question as the issues involved purely federal statutes (FAA vs. the NLRA).

NLRB PASSES “AMBUSH ELECTION” RULE TO END 2011

Contributed by Jeffrey Risch

Big Labor backed portions of a controversial rule to dramatically shorten the time frame in which a union representation election takes place were passed by the National Labor Relations Board (NLRB) on December 22, 2011 by Chairman Mark Gaston Pearce (D) and Member Craig Becker (D) without the agreement of Member Brian E. Hayes (R).  The new rule radically changes the procedures by which the NLRB administers the union election process in the private sector.  Through this new rule, union elections will take place in roughly half the time that they have in recent decades. 

In short, the rule limits the issues employers can raise in the pre-election process and significantly diminishes their ability to appeal unfavorable decision making at the local board level. The net effect will force employers to counter union organizing campaigns in 14-24 days versus the current time frame of approximately 42-45 days. 

Readers can find more information about the new rule on the NLRB’s official website at: https://www.nlrb.gov/news/board-adopts-amendments-election-case-procedures

Needless to say, this move is extremely controversial within the business community. Anticipating the move, on December 20, 2011, the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace filed a federal lawsuit seeking to enjoin the NLRB from enforcing the rule. 

Stay tuned… as 2012 already looks like another bumpy ride…

The NLRB and Boeing: The Battle Reaches Congress

Contributed by Larry Smith

In addition to dealing with the debt crisis, Congress has before it House Bill H.R. 2587, the “Protecting Jobs from Government Interference Act.” This bill is a response to the National Labor Relations Board complaint filed against Boeing. As you know, this NLRB action attempts to block Boeing from opening a plant in South Carolina as opposed to expanding its operations in the state of Washington. Of course, Boeing’s operations in Washington are unionized and South Carolina presents Boeing with the opportunity to employ a non-union workforce. 

The NLRB’s complaint against Boeing has very wide reaching ramifications. Not only is it easily perceived as an invasion of the corporate governance function, but it may also lead to companies considering foreign locations for plant facilities as opposed to “made in America” locations. 

The text of the bill is as follows: 

H.R. 2587 

Section 10(c) of the National Labor Relations Act (29 U.S.C. 160) is amended by inserting before the period at the end of the following: “Provided further, that the Board shall have no power to order an employer (or seek an order against an employer) to restore or reinstate any work, product, production line, or equipment, to rescind any relocation, transfer, subcontracting, outsourcing, or other change regarding the location, entity, or employer who shall be engaged in production or other business operations, or to require any employer to make an initial or additional investment at a particular plant, facility or location.” 

The amendment made by section 2 shall apply to any complaint for which a final adjudication by the National Labor Relations Board has not been made by the date of enactment of this Act.

The bill was introduced by Representatives Scott and Gowdy from South Carolina. 

In the political framework that is Washington, D.C., it remains to be seen if and when this bill will reach the House of Representatives’ floor. It has been passed out of committee. Of course, the remaining question is; what are the odds the Senate will pass this bill? It does, however, reflect a considerable backlash against the NLRB complaint against Boeing. That sentiment is more pervasive than just in the state of South Carolina, the proposed site of the Boeing plant. 

As of July 28th, there is still an ongoing battle between NLRB Acting General Counsel Lafe Solomon and the House Oversight and Government Reform Committee about NLRB’s failure to comply with a July 26th deadline to respond to a subpoena from the Committee to NLRB. Needless to say, the Republicans and the Democrats on the committee have argued about the boundaries of the subpoena. The response by the NLRB to date has not shown the reasoning behind the decision to file the complaint against Boeing.